UPDATE 3-Sage scraps seizure drug study after trial failure, shares slump

* Drug fails to meet main goal of key study

* Shares tumble about 24 pct

* Decision to abandon SRSE study makes sense - analyst (Adds conference call details, analyst comments; updates shares)

Sept 12 (Reuters) - Sage Therapeutics Inc said it would stop developing its drug to treat a life-threatening seizure disorder after the treatment failed to meet the main goal of a key study.

The drugmaker's shares tumbled as much as 24.3 percent - their biggest-ever percentage loss - to $67.00 in morning trade on Tuesday.

The late-stage trial was testing Sage's drug, brexanolone, in patients with super-refractory status epilepticus (SRSE) whose seizures persisted despite earlier treatments.

The company on a conference call said it would not pursue the SRSE study, but would continue data analysis.

"The decision to shelve SRSE makes sense to us given the lack of efficacy signal and the many other clinical programs ongoing," Leerink analyst Paul Matteis wrote in a client note.

Sage, which is also evaluating the drug for use in severe postpartum depression (PPD), said in July 2016 that the drug alleviated symptoms of severe PPD, meeting the main goal of a mid-stage study.

"We remain positively biased that the SRSE result should not change the way one interprets the positive postpartum depression phase 2 data," Matteis said.

SRSE is the most severe form of status epilepticus, under which seizures last for a long time and often recur.

A patient with status epilepticus is initially treated with a class of psychoactive drugs called benzodiazepines. If one does not respond to them, the patient is given anti-seizure drugs.

If the seizure still persists, the patient is placed into a medically induced coma and is given anesthesia along with another line of anti-seizure drugs.

In Sage's trial, brexanolone helped 43.9 percent of patients wean off medically induced coma without seizures returning for 24 hours, versus 42.4 percent in patients given placebo and standard-of-care treatment.

"It may be challenging - due do the complexity of SRSE - to ever fully understand why the study failed," Matteis said.

Last year, hedge fund Kerrisdale Capital said it had shorted the stock, expecting the drug to fail the SRSE trial. (http://reut.rs/2wVaXeR)

Sage, however, said on the conference call that it had identified a subgroup, where the effect size for the drug was better than placebo.

SRSE accounts for about 25,000 to 41,000 cases each year in the United States and there are currently no treatments approved by the U.S. Food and Drug Administration for the disorder, Sage said. (Reporting by Divya Grover in Bengaluru; Editing by Maju Samuel)